dahmakan, a Y-Combinator-backed cloud kitchen startup in Malaysia, today announced the closing of over US$5 million in Series A round of funding with existing and new global investors,┬áincluding Silicon Valley’s Partech Partners and China’s UpHonest Capital.

Y-Combinator, UK-based Atami Capital and former CEO of Nestle also joined the round, bringing the company’s total funding raised to date to nearly US$10 million.

“In the last few years, we have developed an operating system that drastically reduces the traditionally high cost structure of food delivery. The technology allows us to deliver better quality food at more affordable prices compared to other on-demand food delivery startups while maintaining a higher profit contribution margin,” said Jonathan Weins CEO of dahmakan.

“This new funding round will allow us to drive growth in existing and new markets, including launching new distribution channels such as partnering with food delivery marketplaces and retailers as well as expanding our own delivery coverage,” he added.

Besides further regional expansion, dahmakan also aims to expand its leadership team.

Founded in 2015 by former employees of food delivery marketplace Foodpanda (acquired by Delivery Hero in 2016), dahmakan aims to cut out the middleman from food delivery and pass the value back to the customers. By vertically integrating the entire value chain from food production to delivery, its mission is to make food delivery affordable for millions of office workers in Southeast Asia.

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“We are applying predictive analytics including machine learning to forecast sales and in food product development. Our proprietary routing algorithms and AI-powered operating system automates 80 per cent of workflow in both the food production and delivery, solving essentially, an on-demand food manufacturing problem,” Weins added.

In 2018, dahmakan launched a new brand of lower-priced dishes. The company claims this brand has been adopted by over 200 corporate partners in Kuala Lumpur as part of its digital canteen programme, a corporate food delivery offering, which is set to launch in 1,800 offices across Klang Valley in 2019.

Nicolas El Baze, General Partner at Partech Partners, said: “We have looked at different companies in the space in Silicon Valley, Europe and Asia. dahmakan clearly stood out due to its unique operating system that orchestrates all parts of the value chain. The company has reached a crucial inflection point as the system is now ready to expand fast into other markets in Asia.”

According to a report from Temasek, demand for food delivery has grown rapidly at over 73 per cent YoY in Southeast Asia. dahmakan capitalises on this demand for delivery-only food by servicing multiple satellite kitchen around Kuala Lumpur from one factory-sized cloud kitchen.

A recent UBS report researched the global megatrend of consumers outsourcing home cooking to out-of-home prepared meals. The report predicts that by 2030 “the home kitchen might be dead” and completely be replaced.